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Virgin Media is to launch the world's first unlimited, DRM-free music download service in the UK by Christmas. It's signed the world's biggest label - the Vivendi-owned Universal Music Group - for the launch, and says it's talking to publishers and other labels.

The service will be priced at "a couple of albums per month", sources suggest. Ahead of tomorrow's Carter Report, it's also hinted at stiffer sanctions for downloaders.

The network, which serves around four million residential customers, claims it's the first unlimited music service to offer DRM-free music with a network anywhere in the world. Last year, TDC in Denmark broke new ground by offering subscribers unlimited downloads - but these were "tethered" and songs expired when the subscriber cancelled the service, or moved to another ISP.

Evidence suggests physical sales have increased in Denmark. Recently Orange has begun offering unlimited downloads via Nokia's Comes With Music - but these are tethered to a device, and can't be played on the most popular player, the iPod.

In an official statement, Virgin hinted at the tit for the tat - including a promise to send freetards to the naughty step.

Virgin said that a range of measures will, "include, as a last resort for persistent offenders, a temporary suspension of internet access. No customers will be permanently disconnected and the process will not depend on network monitoring or interception of customer traffic by Virgin Media."

Major labels have been reluctant to embrace services that are both unlimited and untethered. Only 18 months ago, top level figures expressed the fear of enthusiasts joining, downloading and then leaving such a service.

"You can't have a subscription model where somebody on a monthly model of say $10, go on in January, download 6m tracks, and leave in February," IFPI chief executive John Kennedy told us.

The Virgin deal suggests that this reluctance has now been overcome: apart from a tiny handful of obsessive hoarders, most people want to get music when they want, not hoard it in case of some future shortage.

File-sharing, allowing subscribers to share songs, remains a step too far, however. Virgin had invested significant sums in just such a service but stood its team down in January.

Nevertheless, if Virgin can sign up the other three majors and independents, other ISPs will have to rethink their plans. Details of Sky's service leaked out here recently.

"We would urge other ISPs to follow Virgin’s lead and create new music partnerships that offer the consumer legal access to the full range of content, regardless of platform," said UK Music's Feargal Sharkey. ®